Lawmaker Withdraws Bill That Would Allow Gig Workers to Organize

A bill to allow workers in the gig economy to organize and collectively bargain for benefits and workplace protections died in the California Legislature Thursday, a day after a diverse group of businesses voiced their opposition.

AB 1727, by San Diego Assemblywoman Lorena Gonzalez, would give groups of independent contractors legal standing to negotiate agreements with "hosting platforms" -- ride-hailing companies or gig labor services like Thumbtack.

“I have no expectation that I’m getting this all the way through this year," Gonzalez said Wednesday. "But we wanted to start a conversation.”

On Thursday morning, Gonzalez announced she's pulling the bill from its scheduled hearing before the Assembly Judiciary Committee.

"Now that first impressions are out of the way and we have the attention of the labor and business communities, it's time for us to take the time this issue deserves to get this right," Gonzalez said in a statement.

Diverse Business Opposition

The bill’s first hearing, in the Assembly Committee on Labor and Employment on Wednesday,  gave opponents a chance to voice their opposition.

Groups ranging from the Internet Association, which represents Uber, Lyft and Airbnb, to the Wine Institute, advocating for wineries and growers, spoke out against the bill and its definition of a hosting platform as “a facility for connecting people or entities seeking to hire people for work with people seeking to perform that work.”

“This isn’t just limited to the tech industry,” said Jennifer Barrera, with the California Chamber of Commerce. “This could impact a host of industries including health care, construction, agriculture -- across the board. So we are concerned with the scope of this bill and how many industries it would actually impact.”

The chamber included the measure on its yearly list of “job-killer bills.”

Gonzalez responded that without the ability to negotiate for themselves, contract workers are forced to rely on the existing publicly funded social safety net.

“We have a growing work force with no protections,” she said. “If you have no rights, the safety net of taxes paid for by taxpayers of the state of California will have to come in and provide for that.”

The Assembly Labor committee agreed, approving the bill on a 5-1 vote.

Contract Status Still Undecided

The bill did not attempt to define whether workers in the California's "gig economy" (a group which Gonzalez said includes between 1.5 and 2 million workers) are independent contractors or employees. That's the subject of an ongoing class-action lawsuit against Uber.

Drivers have brought a case in U.S District Court, arguing that the transportation network company wrongly classified them as independent contractors, instead of employees.

Earlier this year, Lyft paid $12.25 million to settle a similar case that kept its drivers as independent contractors.

The industry group representing Uber and Lyft says AB 1727 still goes too far.

“Our number one, number two, and number three priority has to be ensuring that this economy stays robust and flourishing because it is providing so many benefits,” said Robert Callahan, a legislative advocate with the Internet Association. “Not only to the workers, but to consumers who are getting great quality and affordability and convenience. We just think this bill represents too big of a leap.”